Another Asian bank is planning to expand in the Philippines, the central bank said, as the country’s lending sector continues to be attractive to big banks in the region looking for opportunities in light of a more integrated Asian financial system.
Nestor A. Espenilla Jr., Bangko Sentral ng Pilipinas (BSP) deputy governor for the supervision and examination sector, confirmed on Thursday that a still unnamed Asian bank is set to enter the Philippines.
Espenilla said the bank is still “fixing internal issues” to be able to commence its operations in the country.
Last month the central bank monetary board approved the application of Taiwan-based First Commercial Bank to operate in the country. It was the second foreign bank the monetary board green-lighted to enter
the Philippines.
The other one was Korea-based Wealth Development Bank by Woori Bank. “Asian banks are expanding,” Espenilla said.
HSBC economist Joseph Incalcaterra, meanwhile, said the central bank’s newly implemented interest-rate corridor (IRC) is seen encouraging more foreign banks to enter the country.
Incalcaterra said central bank Governor Amando M. Tetangco Jr.’s recent pronouncement on the possible reduction of the banks’ reserve requirement ratios (RRR) as a result of the potential siphoned off liquidity in its auction is positive news for foreign banks wanting to enter the Philippine market.
The HSBC economist said foreign banks will not be burdened by the RRR in the country.
The further liberalization of the country’s banking industry was signed into law by former President Benigno S. Aquino III in July 2014.
Since then, Tetangco said the law has shown its “clear economic benefits,” including the rise of foreign direct investments and enhanced banking technologies.